According to Brandspur, the funding spotlight shifted to Africa in 2021, when tech startups broke funding records, raising $5 billion across the continent.
According to Briter Bridges, fintechs dominated this funding, accounting for nearly $3 billion of the continent’s investments—double the amount raised by fintechs in 2020 and triple the total in 2019.
According to CB Insights, payment startups globally raised record funding in 2021, totaling $31.9 billion as of December 14.
The winners: Here are some of the companies that have benefited from increased attention to Africa.
Opay, a mobile payments platform, raised one of the largest sums in August, closing a $400 million Series C round that valued the company at $2 billion. With this funding round, SoftBank Vision Fund, the world’s largest technology-focused investment fund, made its first African investment. Opay has experienced tremendous growth: According to Bloomberg, monthly transactions surpassed $3 billion in August, up from $2 billion in December 2020.
Flutterwave, a digital payment provider, raised $170 million in a Series C round in March. In 2021, the company plans to go global, forming alliances with payment giants such as Discover and PayPal that go beyond local tie-ups.
MFS Africa, a digital payments network, has raised $100 million. Through a network of approximately 180 banks and mobile money schemes, as well as 250 global institutions, the company powers more than 320 million mobile money wallets.
Chipper Cash, a cross-border payments company, raised $250 billion between May and November 2021, bringing its valuation to $2 billion. Chipper Cash’s app, which is used in seven African countries, provides a peer-to-peer cross-border payment service.
The big picture: The recent cash infusion reflects increased deal volume in Africa as more companies recognize its growth potential.
We believe Africa is on the verge of experiencing the next great wave of innovation, with a “who’s who” of multinational payment giants pitching in to make it happen. Stripe, Zip, and Mastercard have already gotten involved in the region, and we predict that by 2022, multinational financial services companies will shift their focus from partnerships to acquisitions across the continent.
Africa, with 1.4 billion people and a combined GDP of $2.7 trillion, is a massive market ripe for payment digitization. Regional behemoths M-Pesa and MTN MoMo have already built a nearly $500 billion mobile money market, demonstrating that regional breakthroughs are possible and providing payment providers with an opportunity to digitize.